A high dividend yield indicates:
A)investors expect high dividend growth
B)investors require a high rate of return
C)the stock price is relatively high
D)investors require a low rate of return

Question

Quizplus · Accepted Answer

A high dividend yield indicates that the company is paying out a large portion of its earnings in the form of dividends. Investors who buy stock for income purposes may prefer higher dividend yields as they provide a higher rate of return on their investment. Therefore, a high dividend yield suggests that investors require a higher rate of return. The other options do not accurately reflect what a high dividend yield indicates.

A High Dividend Yield Indicates